Friday, October 4, 2013

Daily Market Trend Guide -- Friday, October 04, 2013

MARKET REPORT                                                                                     October 04, 2013
Though the pattern analysis and the derivatives data suggested otherwise, the Markets had a very buoyant session yesterday and it ended the day with robust gains after moving past both of its 100 and 200DMA. The Markets opened on a positive note and after trading positive in a capped range in the early morning trade, the Markets perked up further. The Markets saw a spike in the late afternoon trade and thereafter kept gradually and steadily making new intraday highs. It gave its intraday high of 5917.60 towards the end of the session. It finally ended the day at 5909.70, posting a robust gain of 129.65 points or 2.24% while forming a sharply higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we are likely to see a modestly negative to flat opening in the Markets. The Markets are likely to take some breather after a robust rally yesterday and we might see the Markets consolidating or taking a minor profit taking. The resistances of both the moving averages, i.e. 200DMA and 100DMA which were resistances would act as support in case of any downside in the Markets.

For today, the levels of 5925 and 5960 would act as immediate resistance on the Daily Charts. The supports exist at 5840 and 5805 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.5665 and it continues to remain neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD too continue to remain bearish as it trades below its signal line. 

On the derivative front, NIFTY October futures have added over 10.09 lakh shares or 6.18% in Open Interest. This is certainly a positive indication as this indicates creation of fresh long positions in the Markets. This also very clearly suggests that the rally that we saw yesterday has not be due to mere short covering.

Given the above reading, and taking the lead indicators into account, the Markets are now preparing stage for a upward movement but before that, they are equally likely to consolidate around these levels. The Markets would see a decisive upward move once its moves past the levels of 5940. If it moves past this level, it can touch 6125 as well. However, before this happens, there are chances that the Markets consolidate with 200-DMA acting a support and keeping itself into a broad trading range.

All and all, from the reading above, it is advised not to attempt to create any short positions in the Markets. Even if the Markets consolidate, they would do so with a positive bias and even in time of consolidation or minor profit taking at higher levels, selective out performance would continue. Any consolidation or any profit taking should be used to make selective purchases. Profits too need to be protected at higher levels. Overall, cautiously positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331




Thursday, October 3, 2013

Daily Market Trend Guide -- Thursday, October 03, 2013

MARKET REPORT                                                                             October 03, 2013
After initial weakness, the Markets had a stable session ahead on Tuesday (Yesterday being a trading holiday on account of Mahatma Gandhi Jayanti), as it ended the day on a positive note. The Markets opened on a modestly positive note but saw a knee jerk reaction to the developments in the US over Government shut down and soon gave its day’s low of 5700.95, taking support on its 50-DMA of 5703.80. The Markets came back into the green after a hour long drama and volatility and then spent rest of the session in a rising trajectory. The Markets kept making gradual highs steadily through the rest of the session. It went on to give the day’s high of 5786.45, and finally ended the day at 5780.05, posting a net gain of 44.75 points or 0.78%. However, it has still formed a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The Markets are expected to open on a flat to mildly positive note. The Markets are in a strong trading range as it took support on its 50-DMA in the previous session and today, it is likely to open around its 100-DMA or 200-DMA and this would act as resistance. Given this, the trajectory that the Markets form post opening would be critical to determine the trend for today.

For today, the levels of 5840.05, the 200-DMA and 5875 would act as immediate resistance for the Markets. The supports exist at 5703 in form of 50-DMA and then at 5675 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.3135 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD continues to remain bearish as it trades above its signal line. 

On the derivative front, the NIFTY October futures have shed over 5.58 lakh shares or 3.31% in Open Interest. This is little negative as it signifies that no fresh longs were added during the modest rally that we saw on Tuesday.

Given the above reading, it very clearly appears that the Markets are in a consolidation phase with little downward bias. This is conclusion is drawn, going by both , the pattern analysis and reading of F&O data. The Markets have taken support on its 50-DMA on Tuesday, but at the same time, even if it gets a positive opening, it will have to move past its 100 and 200-DMA which are in striking distance before it can continue with any decisive up move.  However, given the reduction in Open Interest seen on Tuesday, there are chances that even if we see a positive opening, some minor shedding of gains can be seen and some downside or a ranged session cannot be ruled out.

All and all, on this is for certain that the Markets have roadblocks ahead before it can continue with any decisive up move. It will have to move past its 500-DMA of 5840 before a sustainable up move occurs. Given this, it is likely that we continue to see the Markets in a trading range and also bit volatile. It is advised to avoid shorting in the Markets as there is no structural breach on the Charts as yet. At the same time, very selective purchases should be made while protecting profits vigilantly at higher levels. Overall, cautious optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


Tuesday, October 1, 2013

Daily Market Trend Guide -- Tuesday, October 01, 2013

MARKET REPORT                                                                                 October 01, 2013
The correction in the Markets continued yesterday quite on expected lines as it opened modestly weak but continued with its slide to end yet another day with losses. The Markets opened lower and never really attempted to have any pullback throughout the session as it continued to slide gradually. In the last thirty minutes of the trade, the Markets saw some more pressure coming in as it went on to test its 50-DMA, precisely as expected in our yesterday’s edition of Daily Market Trend Guide as it gave its intraday low of 5718.50. It hovered around those levels a bit and it finally ended the day at 5735.30, while forming a sharply lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

After paring of almost 200-odd points in two sessions, we are likely to see some respite from the weakness that the Markets are exhibiting and see some positive ticks today. Expect the Markets to open on a modestly positive note and look for directions.  The supports of 200DMA and the 100DMA that the Markets broke on the downside would act as resistance and this may kept he Markets range bound.

For today, the levels of 5810 and 5840 would act as immediate resistance on the Daily charts. The support exist at 5709, which is the 50-DMA for the Markets today. If the Markets breach this level on the downside, we will see some more weakness creeping in.

The RSI—Relative Strength Index on the Daily Chart is 47.91 and it has reached its lowest value in last 14-days which is bearish. The Daily MACD, as expected from last two days has reported a negative crossover and it now trades below its signal line which too is a bearish indicator.

On the derivative front, NIFTY October futures have went on to shed yet another 10.44 lakh shares or 5.82% in Open Interest. This is further clear indicator that there was a clear offloading of long positions and no shorts were seen being created.

Taking into account pattern analysis, we may see some support coming in near the 50-DMA levels but at the same time, it is likely that the Market may take only temporary support at these levels. This is because if F&O data is relied upon, it clearly indicates that some more downside is likely in the Markets.  We gave a truncated week as tomorrow is a trading holiday on account of Mahatma Gandhi Jayanti.

All and all, there are chances that the Markets may see positive opening today in the initial trade but the weakness might creep in at higher levels. Alternatively, it is also likely that the Markets remains in a capped range for some time before its takes further directional course. In both of these circumstances, we continue to advice to avoid shorts at these levels and use the downside in making selective purchases while vigilantly protecting any existing profits.  Caution with mild optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331



Monday, September 30, 2013

Daily Market Trend Guide -- Monday, September 30, 2013

MARKET REPORT                                                                     September 30, 2013
After consolidating for couple of sessions and managing to keep its head above 200-DMA for couple of days, the Markets finally corrected in the last hour and half of the session on Friday. The Markets opened on a modestly positive note as it gave its intraday high of 5909.20 in the very early minutes of the trade. After trading briefly in the positive, the Markets slipped into the red. The Markets spent the most part of the session trading in a range of 30-odd points in the negative territory. However, in the last hour and half of the trade, the Markets slipped further and tested both of its DMAs as it gave its intraday low of 5819.30. It finally ended the day at 5833.20, posting a net loss of 49.05 points or 0.83% while forming a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY
The Markets have closed a notch below its 200-DMA. Today, it is likely to see a negative opening and this is likely to see the Markets opening well below its 200DMA and 100DMA and given this, these levels would become resistance for today. Intraday trajectory would be crucial to see if the Markets recovers after opening lows but otherwise, the charts suggests that the correction in the Markets would continue.
For today, the levels of 5841 and 5875 would act as immediate resistance levels for the Markets. The supports exist lower at 8790 and 5750 levels.
The RSI—Relative Strength Index on the Daily Chart is 53.1311 and it has just reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD trades above its signal line but it is moving towards reporting a negative crossover. On the candles, An engulfing bearish line occurred (where a black candle's real body completely contains the previous white candle's real body).  The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NIFTY).  It then signifies that the momentum may be shifting from the bulls to the bears. 
On the weekly charts, RSI is 51.5670 and it remains neutral with no failure swings or any divergences.  The Weekly MACD remains bullish as it trades above its signal line but this too is moving towards reporting a negative crossover.
On the derivative front, NIFTY October Futures have shed over 1.54 lakh shares or 0.85% in open positions. This signifies that there has been offloading of positions and no significant amounts of shorts have been added.
Given from all the readings above, i.e. taking the pattern analysis read along with F&O data and lead indicators, the Markets are more likely to see continuation of corrective actions in the Markets. The Markets are likely to see itself drop below 200DMA and 100DMA and it is likely that these levels act as resistance later on. The chances of the Markets testing the levels of 50-DMA which is 5713, cannot be ruled out if the weakness persists.
All and all, the Markets are set for negative opening today and given this, it is recommended to wait before initiating any fresh positions today. Unless the directional bias gets determined, shorts should be avoided. Selective purchases may be made as selective sectoral out performance would be clearly seen. Overall, continuation of modestly positive outlook without any over exposure in the Markets is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331